‘Even when he cobbles his coalition together, Merz will inherit a bulging in-tray’
Friedrich Merz was quick to declare victory tonight after his conservative CDU-CSU alliance won a clear victory in Germany’s snap elections. It was “a historic election evening,” he said, following “a terrific campaign,” adding he was confident he could “create a government capable of acting in Germany’s interest soon.”
The 69-year-old corporate lawyer and investment banker is now set to become Germany’s next chancellor, replacing the lacklustre Olaf Scholz, whose social democrat SPD party saw a catastrophic collapse in support.
However, Merz faces massive challenges, from an angry electorate to an ailing economy and unprecedented geopolitical turmoil.
The election results already showed how unsettled the country is.
Merz’s CDU-CSU benefited from a broad rightward and anti-incumbency shift, winning 29 per cent of the vote, up from 24.1 per cent in the previous elections in 2021. But the biggest gains went to the far-right, pro-Russia Alternative for Germany (AfD) party, which soared into second place, almost doubling its vote to 19.5 per cent, up from 10.4 per cent in the last election in 2021.
The AfD’s xenophobic rhetoric has echoed a growing anti-immigration mood across Germany – and Europe – but its extreme policies mean that all the other mainstream parties have ruled out partnering with it in a coalition. While the AfD’s vote marks a record for the far-right in Germany since the Nazi era, it is down from earlier this year, when it won controversial support from tech titan Elon Musk and US Vice President JD Vance.
As for Scholz’s centre-left SPD, they came third, with just 16 per cent of the vote, down from 25.7 per cent in 2021, falling to their worst defeat since 1887, when Otto von Bismarck was chancellor and William I was emperor.
Scholz’s partners in the so-called Traffic Light coalition also suffered: the Greens were down two points to 12.7 per cent, and the free-market FDP fell from 11.7 per cent in 2021 to 4.9 per cent, below the five per cent threshold needed to enter parliament. Indeed, the combined Traffic Light vote fell from 52 per cent to 33.5 per cent.
Nonetheless, the humiliated SPD will likely be Merz’s coalition partner, and he already indicated last night he would try to rebuild bridges as he starts negotiations with them. This will almost certainly be under new SPD leadership: Scholz is expected to be replaced by Defence Minister Boris Pistorius, one of the few SPD politicians with a strong popular profile.
With the parliamentary arithmetic finely balanced, it is possible that the Greens are brought in too, for another three-party government – but Merz will hope to avoid that complication, having seen how the rancorous traffic light coalition fell apart in acrimony.
But even when he cobbles his coalition together, Merz will inherit a bulging in-tray.
The German economic model is creaking. Industrial manufacturing, so long a driver of both domestic and European growth, is struggling, while exports are under pressure, particularly cars. US President Donald Trump is promising tariffs on European imports and has singled out German cars. Chinese electric vehicles (EVs) are even competing with German models, which have been too slow to switch to electric. And the country is still adjusting to the end of cheap gas from Russia, in the wake of the war in Ukraine.
Ukraine is also at the heart of Germany’s international dilemma. With Trump pushing for a peace deal with Russia, European countries are recognising they need to spend much more to support Ukraine. Trump has also suggested that the US could pull back from Nato if European countries do not spend much more on defence.
Germany’s response will be crucial. Merz has committed to boosting defence, but he needs to change both German and European Union budget rules to ensure the massive spending rules. This will mean tightening spending elsewhere, and Merz will have to brace Germans for the tough years ahead.